Pye Electronics sees few growth prospects

Press, 4 May 1978, Page 13

Pye Electronics sees few growth prospects

PA Auckland Pye Electronics, Ltd, expects the growth opportunities this year will be limited. Some of the company’s activities were expected to improve their performance, but a continuing fall in colour Television sales was expected. The demand for colour television in the next five years must bring into question the independent survival of some of the manufacturers now involved, the managing director (Mr M. J. Hunt) says in the annual report. “There are now six individual manufacturing companies, and, with projected annual production levelling out at about 70,000 units, some companies will need to evaluate their presence within this industry,” he says. Pye’s profit for the year to December 31 fell 36.9 per cent to $1,243,447. The company increased its share of the colour TV market to 30 per cent of the industry sales, but the colour TV contribution to group' profit was reduced by more than $500,000 after tax, because of a change in the criteria for setting margins on pro-duction-cost.

An appeal to the Commerce Commission was successful, but no benefit was gained before the end of the financial year.

The industry produced 121,000 colour units in 1977, compared with 149,000 in the previous year. Consumers took about 95,000 leaving about 25 per cent of the year’s production unsold, Mr Hunt says. The market-share in audio

products was maintained, and industrial electronics accounted for a higher proportion of group turnover. The profit Was after providing $58,088 more for depreciation at $683,391, but $795,176 less for tax at $702,488. The dividend, unchanged at 13 per cent, required a steady $416,219. The earning rate on shareholders’ funds was 9.5 per cent, compared with 17.6 per cent previously. Shareholders’ funds rose $1,388,321 to $13,696,444, including steady ordinary capital of $3,201,687.